John obtained a line of credit from Cape Town Bank. For the line of credit, CTB took a valid security interest in John’s equipment (including after-acquired). CTB filed a UCC-1 covering "equipment." On the same day the line of credit was granted, John borrowed $25,000 on that line of credit. Seven days later, one of John’s creditors caught up to him and levied on one of John's machines valued at $15,000. Four days, later, John borrowed another $15,000 on its line of credit at CTB.

Which statement is correct?

1. CTB's priority in the machine levied on will not extend to the additional $15,000 advance because that advance came after the lien creditor's levy.

2. CTB has priority over the lien creditor to the extent of the entire balance of the line of credit ($40,000).

3. CTB's priority in the machine will not extend to the additional $15,000 advance because CTB did not perfect its security interest in time.

4. CTB's priority in the machine will not extend to the additional $15,000 advance if CTB knew about the levy at the time of that advance.